What is Software-as-a-Service and why should you care?
Software-as-a-Service (SaaS) has quickly crept into the technology vernacular surrounding convenience and fuel. We thought it might be helpful to explain what this is and ultimately why you should care.
Every retailer relies on software to run your business. For most, this involves the EPOS and back office systems you use and for larger retailers or multiples, possibly a head office solution too. All software is sold under license. That is, you pay an amount of money upfront for the right to use the software for the period you license it for. Traditionally, this has meant you’ve paid in full for this right for your chosen duration, normally 1-3 years. In addition to the license you may also purchase support in the same way, again to run concurrently for the same length of time. The downside to purchasing software and support in this way is that it means upfront expenditure. Finding the money for what can be a sizeable investment is never nice. It also means that every few years your accounts get hit with an out-of-the-ordinary expense that can be tough to budget for. Like everything, the cost of software and support goes up, so with each renewal you’re left paying a bigger and bigger upfront lump sum. Unfortunately, when you buy your licenses and support for your chosen duration there’s little flexibility thereafter. If your business grows and you need more licenses and support, you’ll end up taking out additional agreements, if you no longer need what you originally contracted for then there’s nothing you can do, this is a sunk cost that cannot be adjusted until the next renewal.
SaaS on the other hand takes a completely different approach to licensing software. Instead of paying for the software you need upfront, you essentially pay for it in much smaller instalments – typically monthly or quarterly, based on a unit of consumption – normally defined as a user, device or even store or forecourt. It means there’s no scary exceptional costs every few years and you can much more easily budget for what you use. It works on the same premise as other utility bills like electricity where you simply pay for what you consume. And just like your utilities what you consume can go up or down.
To help elaborate further, think of SaaS like Spotify. While you pay your subscription, you have access to all the music ad-free. You pay for the service every single month until you no longer want it. SaaS in the world of retail is no different.
But there’s lots of other benefits too. Software companies who develop to a SaaS model release new innovation faster, with the intention of continually reinforcing the value of the service and software to the customer. It means there’s little waiting around for new features and functions, all of which are made available to you the moment they’re ready as opposed to when you next buy a license. Increasingly, the functionality in software available to SaaS subscribers is far richer than those who chose to buy in a conventional way. Just look at Microsoft Office 365. While you can still buy Office out of the box, the number of applications available to you pretty much remains static and the all-round experience is almost incomparable to that received by those on subscription with Office 365, where new apps and features are appearing all the time. Likewise, with SaaS there’s scope to add other things to the service you might need, like support, devices even accessories – all paid for in the same pay-as-you-go basis and bundled under one simple recurring fee.
SaaS has become an established software licensing model in all kinds of different industries, the benefits revolutionising how software is paid for and used. TLM is pioneering SaaS in convenience and fuel retail. Our evolution suite of products is being developed exclusively as a SaaS solution. This means you’re able to obtain all the software and support you need on a manageable per site, per month fee starting with evoPOS, our next-generation EPOS.
If you’d like to explore the benefits of SaaS further, please get in touch.
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